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tv   [untitled]    April 14, 2011 9:30am-10:00am EDT

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without the light from moscow it's not worth five of the headlines of the world's emerging superpower as a pleasure the commitment to a new global economy i'm calling the nato led coalition to play by the rules in libya president dmitri medvedev says the u.n. has some explaining to do about how its resolutions on libya and ivory coast are being played out. the u.s. is accused of manipulating
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a regime change in the arab world through cyber warfare meantime all under the guise of democratic revolution setting up an army of online accounts pleading for western intervention in libya may be just one of the tricks stopping the sleeves of the cia. on the parents over russian children with a rare genetic illness to plead for government help which they say is being denied because of the cost of the two hundred fifty children with hunter syndrome in russia less than half are receiving lifesaving drugs so i have more of those stories in about thirty minutes time but up next it's all going off and he's talking to an i.m.f. representative and asks him what the future holds for the economies of brazil russia india china and south africa of course we're talking about the bric countries there you can find out what he had to say about that and other topics as well our interview program that's coming up in just a few moments here outside. we'll
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. bring you the latest in science and technology from the realm of russia. we've done the future coverage. hello again and welcome to fart like me shell an artsy hour when aren't they my guest on the program. of the i.m.f. . the international monetary fund says the economies of brazil russia india china and south africa are going to see a tremendous growth in the chinese analyst as far as to say the brics financial systems will make up a third of the world's g.d.p.
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in just four years today there has to brics countries are in china and discussing joint opportunities the future health. and the what are the perspectives of this aggressive young international organization has the former senior representative of the i.m.f. in moscow and professor at the high school of economics mark. ten years ago goldman sachs economist said the joint potential brazil russia india and china essentially could become the world's top economies by twenty fifty this year south africa joined the group adding even more potential to the financial systems today brics makes up almost a third of the elfs territory nearly a heart and was a population and a considerable part of the global agricultural resources coupled with immense natural resources and cheap labor costs these factors provide for their current rapid and stable economic growth. both of them welcome to
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the show my pleasure thank you very much thanks for coming well first of all the term bric it was it was born as a purely analytical chair like a special special with the. you specialists experts used to. when they were talking about this for country but it was formalized in two thousand and nine after the summit of the bric countries in russia what is the point of these summits that their leaders hold every once in a while what are they driving what's the result they're trying to change. you know the the summit to solve when they first started in your country in bergen two thousand and nine i was among the skeptics saying this is just purely symbolism because as you pointed out when goldman sachs created this terminate jim o'neill's
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career in two thousand and one it was just an acronym it was just a reference to the four largest economies in the world after the g seven what were the next four countries on the list and there was no particular rhyme or reason historically culturally politically financially they're very different countries india and china are still very poor countries russia and brazil on a per capita g.d.p. basis are much wealthier countries so what are they cut what do they have in common some are manufacturers some are raw material exporters what is the common basis for a summit. and as i said i was a bit of a skeptic however i have to admit that i think that the initiative the president medvedev took in two thousand and nine could bring this group together as leaders. makes
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sense first of all within the context of the g. twenty these these are the after the g. seven this are the next large group of countries and particularly after welcoming south africa to join them in this past february to make five. they represent after all even now twenty percent of the world's output of g.d.p. and they represent forty percent of the world's population this is not an insignificant grouping but the question could be is this just symbolism. maybe an answer this question will be if for example today or tomorrow these leaders in china will work out a joint possession a joint idea that there will be later pushing in the framework of the g. twenty will this happen would you say well my my view about international politics is that. g five.
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twenties don't really have much significance what what has significance for individual countries pursuing their interest when they have relative economic and financial power and when they decide to work with some other country. years ago i am one of those who believe that only bilateral relations matters everything else the justifications everything is basically declarations however when countries for bilateral reasons want to work with others to pursue a what they perceive as a common threat or common interest they can have real power and there in i think it is a possibility that you're right that if they were to get together if there were some issue on the table or off the table more likely that was of common concern to these five leaders in sign your they could make
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a difference. but let's be a little bit skeptical let's remember that these countries are very different and the well south africa made them even more different because because well brick work was a good name it was a brick. it was something to do to tell a lie like pink floyd you can build a while right through the clearly walford points good to hear those bricks now in south africa first of all do you do you agree approve of this decision to make it five does this country really belong to the circulation but anyway when some fifth country joins means it's already an organization something to enjoy. and i think i think the addition of south africa was a little bit gratuitous. because i think that one of the features that china russia
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india and to some extent india and brazil head in common is that they are not only large economies the largest after the g. seven but they are creditor countries. they have the money now south africa is not really in that category south africa's still by african standards a wealthy country but by the standards of these other countries it is still lagging well behind. but time is sure that then that helps i mean if it has a problem of curial just like brazil and i think the potential within a very few years to catch up with some of the others so if we're talking about not the actual situation in two thousand and eleven but we're looking ahead to two thousand and fifteen two thousand and twenty then one can understand the logic of going ahead and inviting south africa during this group but let me just underline the point that the more members you have a visit grouping the less likely to have
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a meaningful agreement the less sympathetic it is for people like you who believe in a bilateral right ok but many people still say there is a rather special well that the brics countries played in the recovery in the post crisis recovery is a true. yes i think undoubtedly if you if you look at the numbers produced by the international monetary fund it's quite clear that the drivers of world growth have for two thousand and eight work countries like china. brazil india nigeria and south africa russia until until last year was not part of that after the sharp drop in g.d.p. in two thousand and nine but even russia is recovering relatively well now not at the chinese rates but still quite well so it is it is certainly true that these
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countries have become a locomotive they have decoupled from what is happening in the you might say the old tired advanced countries of the west analysts see the us economy overtaken by the so-called brakes by as early as two thousand and eighteen or now on the brics rapid growth in the world by spotlight the need. your factory of the world that's what china's and called it's becoming quite a challenge to buy anything which was not at least partially made in china until the weight nineteen eighties and once in the world economy was minimal at thirty years later china is the world's top manufacturer the second largest economy after the who was saying and one of the fastest growing emerging economies of the brics brazil russia india and china has accounted for a third of the global g.d.p. growth over the last ten years letting the economist speak of the global economic
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power shift the wealth of the g seven economies are predicted to be overtaken by the brics within the next decade of so the leaders of the bric countries held their first summit in russia as you culture and bird two years ago where they discussed ways to reshape the world financial system they spoke of the need to reduce dependency on the u.s. dollar some time later china and russia decided to use their own national currencies for bilateral trade the brig has recently been joined by south africa the biggest economy on the continent. and sachs which doing better in britain ten years ago expects the major emerging markets will not slow down and by twenty twenty will contribute about a half of the global g.d.p. growth. well the idea of bric was the emerging countries as they put it will develop faster than the developed
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capitalist economies becoming more and more independent is this happening is this really a trend after the crisis not yet not yet not yet but the potential is really there . you know the world has been dominated at least for the last twenty years by in economic and financial terms by what you could call the washington consensus it was a. kind of a keynesian view of the world that the government had a role but the private sector should be left to do what it was sachs anglo-saxon model like obviously sense of two thousand and eight crisis this model is somewhat discredited and so these countries come along with very different cultural political and economic traditions and say wait a minute we don't necessarily want to follow individually or collectively the washington consensus now they don't have anything to replace it with yet but the
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potential is clearly there. says martin gellman the former senior resident representative of the i.m.f. in moscow and a professor of the higher school of economics spotlight will be back shortly after we take a break so stay with us we will be back with this interview in the congo. download
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the official t. application show on phone oh i pod touch from the i choose ops to. launch obscene life on the go. video on demand parties mindful comes and r.s.s. feeds now in the palm of your. question on the com. welcome back to spotlight and just a reminder that my guest in the studio today is mr morton galen and from a senior resident representative are the international monetary fund master and professor of the higher school there canonic smartened during the break you just as
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you just said you mentioned that the fun thing would be to try to understand what they are the leaders could do with that summit they're holding today in china in the in the country or what what's fun about it what could they do with it i do know it's being a bit provocative and talking about that particular group of leaders having fun together but if they're going to go all the way to one island why not they've gotten a speech is the the point though is that they've got a formal agenda which is pretty boring ok the pretty entered dime issues of international trade and in poor countries development and better coordination with the g twenty. however these countries is diverse as they are guth place of common threat but right now they face this common threat individually in the threat is called inflation you know in russia the first quarter of the year
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inflation exceeded nine percent at an annual rate in china the preliminary estimates are that inflation in the first quarter of the year exceeded six percent which for the chinese is a very dangerous signal in india brazil they have the same south africa the same inflation problems these are not just domestically created in russia there was a particular instance where the budget the end of last year was too expensive but basically the inflation comes because there's too much liquidity in the world economy where does it come from the federal reserve and the central banks of the advanced countries that are trying to prop up their economies but. because the investment part possibilities are poor or the money comes to the emerging market countries in drives inflation so this inflation problem is a threat and believe me all five of these leaders meeting in china are going to have very clearly in mind what happened in north africa and in the middle east with
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food and oil prices. speaking of brits. know that the mess is there longer brick and some people are once again talking about taking the are out of this out of this world well i mean i mean saying russia doesn't really belong do you. you're a skeptic you're a person is new and you teach in mass in the muslim high school of economics are there grounds to to to question russia's. position inside this this next. first of all i don't i don't think brics is really a an organization it's just a grouping and it happens to be a grouping that is just the brain king of countries after the g. seven in terms of global economic power well whether these russia skeptics like it
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or not russia is still there and if you whether you use purchasing power adjusted g.d.p. or whether you use dollar exchange rates the russian economy is still at the end of two thousand and ten is still depending on which data set you look at the eighth of a ninth largest economy in the world so it's clearly part of this group people criticizing russia the russian government is too much involved in the economy but if we look at china going to say i'm going to say. it's a tough comparison once again if you're looking through the lens of the washington consensus one might be very critical in fact one might be very critical of all these countries in india basically the banking system is completely controlled by the state completely so. you you have countries where the role of government is much more into to the economy than one normally would associate
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with north america or europe and india and india the even changing heads of private balance and you're going to look at right right good point nobel prize winners they're going to know that you're not going to be there to be a baby anymore right because they said so that said ok now another point another point that really worries many people and it does worry me to this corruption in russia well here i think we are one of the champions i mean the russian economy is one of the champions and in corruption so so so this doesn't matter does it in terms of the economy in terms of growth in terms of compound investment out for shit. well certainly corruption is part of the matrix of problems that is causing the country to. be trapped in this raw material producer. impasse that it's in and not be able to
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go beyond that after all basically the russian economy has a per capita g.d.p. of about fifteen thousand roughly fifteen thousand dollars per capita and you've had countries in the twentieth century that have come up against that level and in never they bounce up and then they go back down argentina venezuela and that so the real challenge for for russia is whether russia is going to just be bumping up against its limit because of problems of corruption or whether like korea. remember korea was very poor forty years ago whether russia can like korea can move beyond that fifteen thousand kind of barrier and become a much more normally functioning economy where rule of law and corruption are are are. normalized with other countries. it's
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possible listen there are countries like italy which after world war two were very corrupt. dynamic private sector of a very corrupt political class and with the mafia the italians have come a very long way in cleaning it up and so i'm relatively optimistic or let's say skeptically optimistic that if the italians could do it if the koreans could do it with their child ball and everything the dominant group of the japanese with the beats and when the. conglomerates and pay me back payments to pull politicians if they could do it why shouldn't the russians be able to do it but it i don't know what the key is to solving this problem but i i certainly hear the right kinds of words coming out of the kremlin on this. you know when we were talking about overcoming the crisis ok you said well the russia is doing much better now many people say that russia was one of the most worst hit by the crisis despite this air
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bag of money that really proud of. what was the reason that russia was so much. i think there's a simple explanation but. alexander you're absolutely right russia was hit worse than almost all the other of the other countries and the reason is because you russians basically don't have very much trust in your own economy in your government. so that what happens is when the crisis started money just started flowing out of the country and not just foreign investors say i want to get my money out russia's very risky all of a sudden but russian investors taking their money out or not putting their money back in so that they were just taking it out of the banking system say well banks are looking a little bit shaky here after all that happened in nigeria that happened in south africa that happened in brazil. money goes out of the banking system but in those
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countries if the money stayed in the country in russia though the money actually left the country not all along but why people who started taking away money was the foreigners they were the first you know i think i think considering the situation i better take my money away we the russians especially the businessmen they are taught to take to look at the foreigners to be taught by for to to follow their school of economics where you are proud to be teaching is a part of the mechanism of teaching russia from the west how to run the business you should admit that it's but it's one of the little did i get it i. just followed the example of furthers this the path they take you behind you we must go further we should do so little until what's was that and only read about it in alexander the point though is that there's
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a really good reason that this happened it wasn't because that's what we teach at a higher school of economics but because in russia unlike in brazil unlike china unlike india in russia you could take your money out of the country in those other countries they have capital controls that were the only two it's illegal in russia since two thousand and six june two thousand and six you have complete convert ability of the ruble and there's a good historical reason for that because. you had a terrible social experiment for seventy four years under also the communism and in this country and so once you get rid of controls any hint of reimposing any control like the brazilians or the commies are doing that right so you can't do it you don't have you're caught between a rock and a hard place here because you have to keep the economy completely open but there is no there's no emerging market economy in the world that is as open as the russian
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economy so it means can we make it use it as an advantage not worth over and over liber are over liberalism yes yes given the fact that you for historical reasons you don't have much choice yet you could turn it to an advantage for instance. as your president would like. to become an international financial center or for the root russian ruble to become eventually a reserve currency one of one of the preconditions but you just mentioned earlier corruption and a few others but one of the preconditions for these type of developments international financial center international reserve currency is complete convert ability of the currency and so yes i mean that bats part of the building blocks. thank you thank you very much and just a reminder that my guest on the show today was more than the former senior resident representative of the i.m.f.
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in moscow and professor of the irish school of economics and that's it for now from all of us here if you want to have your say on spotlight or have someone in mind who you think i spent the next time to talk now live in al green of ads r.t. t.v. dot are you unless he spotlight interactive will be back with more friends than common plan was going on in and outside russia until then stay on r.t. and take a thank you to french response. she's
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available in the grand central shirts in limbo and. president combined. which resembles beatriz's. taj mahal hotel. the same. hotel. the hotels shirts and. maybe her tones carry collection among the clothes of a man.

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